Internet giant Yahoo have overhauled its online picture-sharing service to create a venue "for the masses" to share digital images with family or friends, the company has announced.

A beta version of revamped Yahoo Photos went online with select availability to allow a few weeks for fine tuning the service, according to Yahoo product manager Tim Anderson.

The unveiling of the enhanced Yahoo Photos came as the Sunnyvale, California, company intensified its battle with rival Google for devotees by becoming a place where online communities can build social networks.

Yahoo put its improved digital photo-sharing service on display at a downtown San Francisco art gallery on the eve of the announcement.

Yahoo Photos was modified to enable people to easily make "smart albums" with restricted access instead of allowing anyone on the Internet to view the pictures.

Tools for editing and organizing pictures were built into the site so people can categorize and finesse images uploaded to Yahoo servers.

Among the "Web 2.0" features that Yahoo said they were delivering was the ability to "drag-and-drop" pictures by clicking on them.

The new service was designed to automatically convert to a quality that shortens transmission times while maintaining printing quality.

The new Yahoo Photos service would be rolled out in phases and was expected to be available worldwide by the end of July.